Question 1

If social and psychological factors play a strong role in customers' needs, then:

Accepted Answer

A)  The implications for differentiation are far reaching
B)  Customers' lifestyles, aspirations, and many other factors must be analyzed
C)  A firm's senior managers should regularly meet with customers in order to understand how customers currently use and value product attributes
D)  All of the above D

Question 2

The two sides of the potential sources of differentiation are:

Accepted Answer

A)  The customers' side and the suppliers' side
B)  The demand and the supply sides
C)  The customers' and the employees' sides
D)  The structural side and the cultural side B

Question 3

The value curve:

Accepted Answer

A)  Is identical to the product life-cycle curve
B)  Identifies the sources of variations of the cost for delivering a product or a service over time
C)  Describes the evolution of the value of a product or service over time for customers
D)  Allows analysts to see the key performance attributes that deliver value to customers, and any gaps in the market D

Question 4

The main lesson of differentiation is that:

Accepted Answer

A)  Differentiation is about offering standard high quality product features
B)  Differentiation means identifying all possible interactions between the firm and its customer and questioning how these interactions can be modified to deliver greater value to the customer
C)  Differentiation means distinguishing between different customers
D)  All of the above

Question 5

Multidimensional scaling is a statistical technique that can yield a perceptual or product space map like Fig.10.1,which can help you understand customers' multidimensional needs, or perceptions of their needs

Accepted Answer

A) True 
 B)False

Question 6

The difference between search goods and experience goods boils down to when a customer can ascertain the product's true attributes: on inspection, or only after experiencing the product

Accepted Answer

A) True 
 B)False

Question 7

Differentiation means making your product or service unique in some way that customers will pay extra for

Accepted Answer

A) True 
 B)False

Question 8

On the demand side of differentiation the key questions to ask about customers are what motivates them, and what criteria do they choose when selecting products

Accepted Answer

A) True 
 B)False

Question 9

Which of the following industries offers more potential for differentiation?

Accepted Answer

A)  Clothes and restaurants
B)  Cement and wheat
C)  Jet fuel for airline jets
D)  Sulfur and ethylene

Question 10

One can synthesize the demand side of differentiation by the following statement: differentiation is based upon the product characteristics that have the potential to create value for customers, customers' willingness to pay for it, and a firm's optimal positioning related to its differentiation

Accepted Answer

A) True 
 B)False

Question 11

Because all complex products and services serve multiple customer needs, understanding these needs requires:

Accepted Answer

A)  Multivariate analysis
B)  Extensive use of focus groups
C)  A multidimensional analysis of all competing products' main attributes
D)  Thorough statistical analyses of large customer samples

Question 12

Tangible differentiation includes the performance of the product - for instance its reliability, durability and taste (for foods) - as well as its shape, color, size etc.

Accepted Answer

A) True 
 B)False

Question 13

In the case of consumer goods:

Accepted Answer

A)  Value chain concepts are applicable, but with a much smaller probability of success
B)  No analytical tools are available
C)  Consumers are still involved in a chain of activities from research to consumption, particularly for durable goods, so value chain analysis can still be insightful
D)  Forget value chain analysis and use 'coarse marketing' techniques

Question 14

Commodities are:

Accepted Answer

A)  Goods which are easy to differentiate
B)  Goods in which differentiation is difficult but still possible
C)  Goods which are only sold in wholesale markets
D)  Goods which are only sold in financial derivatives markets

Question 15

Which of the following is not a potential "driver of uniqueness"?

Accepted Answer

A)  Your product's features and performance
B)  The quality of your purchased inputs
C)  Your organization's structure
D)  The skills and experience of your employees

Question 16

You can usually ignore social and psychological factors when planning to differentiate a product or service

Accepted Answer

A) True 
 B)False

Question 17

Physical characteristics of a product are one of the determinants of its potential for differentiation

Accepted Answer

A) True 
 B)False

Question 18

Differentiation deals with "how" a firm competes and the way in which it can offer uniqueness to its customers

Accepted Answer

A) True 
 B)False

Question 19

The value curve:

Accepted Answer

A)  Maps the performance characteristics of competing products
B)  Maps customers' psychological needs
C)  Maps different strategic groups
D)  Maps customer segments

Question 20

Differentiation does not increase costs

Accepted Answer

A) True 
 B)False

Exam 10: Differentiation Advantage

If social and psychological factors play a strong role in customers' needs, then:

The two sides of the potential sources of differentiation are:

The value curve:

The main lesson of differentiation is that:

Multidimensional scaling is a statistical technique that can yield a perceptual or product space map like Fig.10.1,which can help you understand customers' multidimensional needs, or perceptions of their needs

The difference between search goods and experience goods boils down to when a customer can ascertain the product's true attributes: on inspection, or only after experiencing the product

Differentiation means making your product or service unique in some way that customers will pay extra for

On the demand side of differentiation the key questions to ask about customers are what motivates them, and what criteria do they choose when selecting products

Which of the following industries offers more potential for differentiation?

One can synthesize the demand side of differentiation by the following statement: differentiation is based upon the product characteristics that have the potential to create value for customers, customers' willingness to pay for it, and a firm's optimal positioning related to its differentiation

Because all complex products and services serve multiple customer needs, understanding these needs requires:

Tangible differentiation includes the performance of the product - for instance its reliability, durability and taste (for foods) - as well as its shape, color, size etc.

In the case of consumer goods:

Commodities are:

Which of the following is not a potential "driver of uniqueness"?

You can usually ignore social and psychological factors when planning to differentiate a product or service

Physical characteristics of a product are one of the determinants of its potential for differentiation

Differentiation deals with "how" a firm competes and the way in which it can offer uniqueness to its customers

The value curve:

Differentiation does not increase costs